The S&P 500 was largely unchanged Monday as a stock-market rally that once appeared unstoppable entered its longest stretch of vulnerability since the financial crisis.

Monday’s increase of less than 0.1% marked the 51st trading day since the index suffered a correction—a decline of at least 10% from a recent high—its longest stretch in correction territory since 2008.

Investors tepidly traded most of the day, with the fewest number of shares changing hands since Dec. 29. Analysts said many investors held off on making any meaningful changes to their stock portfolios to see whether a selloff in government bonds would push the benchmark 10-year U.S. Treasury note past the milestone of 3%, a level it hasn’t reached since 2013.

The long-dated Treasury note reached as high as 2.996% in early trading Monday before moving back down to 2.973%.

The 10-year Treasury yield is a key metric affecting borrowing costs for companies and consumers, and some analysts worry that rising rates can threaten economic growth and corporate profitability.

“This has investors debating whether the rise in Treasury rates will be enough to downgrade the strength of the economy,” said
Brent Schutte,
chief investment strategist at Northwestern Mutual Wealth Management.

Mr. Schutte and other analysts say rates would have to move meaningfully higher to significantly disrupt the U.S. economy.

Still, money managers are bracing for continued volatility as a raft of other inflationary pressures, including billions of dollars in tariffs on goods and signs of rising wages, are likely to force investors to consider big changes to their stock portfolios.

The S&P 500 rose 0.15 points, or less than 0.1%, to 2670.29, while the Dow Jones Industrial Average fell 14.25 points, or less than 0.1%, to 24448.69. The Nasdaq Composite declined 17.52 points, or 0.2%, to 7128.60.

Energy stocks, which tend to benefit from some inflationary pressures such as rising commodity prices, rose 0.6% in the S&P 500, extending the sector’s gain for the month to 9.3%, the best of any other industry in the index.

A half a percentage-point increase in the 10-year U.S. Treasury note earlier this year forced investors to consider whether the run-up in stock valuations could still be supported in an environment where less-risky assets offer a greater yield. That contributed heavily to the February selloff that initially knocked the Dow industrials and S&P 500 into correction territory.

Major indexes have attempted to mount a recovery since then as many investors said strong corporate earnings and continuing global growth would help keep equity valuations desirable.

But if the 10-year Treasury note climbs past 3% and shows signs of moving toward 3.25% and higher, investors will again be forced to ask whether it makes sense to stay invested in riskier assets with lower yields. The yield on the S&P 500 was about 2% as of earlier this month, according to S&P Dow Jones Indices.

“It’ll look like a bear market in bonds, which should make investors concerned since risk-free assets will be yielding more” than many stocks, said
Michael O’Rourke,
chief market strategist at the brokerage firm JonesTrading

A Wall Street street sign hangs in front of the New York Stock Exchange.
Photo:
Michael Nagle/Bloomberg News